Author: Lúcio Abrahão

Source: Jornal do Brasil - RJ - 22/07/2009

As was predictable, the Federal Revenue confirmed that the Brazilian tax burden broke a new record in 2008 - 35,8% of GDP, adding up to R $ 1,034 trillion in collections made by the Union, states and municipalities. Even with the government indicating that in 2009 there will be a decrease in the percentage of taxes collected in relation to the sum of Brazil's wealth - due to the crisis and the tax exemption of some sectors - the fact is that the tax burden is huge and impairs the competitiveness of companies nationals in the face of the globalized market, in addition to penalizing taxpayers, imposing revenue proportionally equivalent to that of richer and more developed countries.

Another problem perceived when we analyze the resounding tax collection of our governmental bodies is that there is an imbalance between taxation on income and consumption, with the greatest weight falling on the latter. Thus, lower-income taxpayers are proportionately more penalized than those who earn more, because, despite being exempt from income tax, they pay the same tax rates on products and services, values ​​that end up being fixed for everyone and that consume higher percentages of lower incomes.

Thus, the need for tax reform to reduce distortions, to improve the competitiveness of Brazilian companies, to exempt sectors subject to high incidence of taxes, and to adequately balance the collection of low taxpayers, becomes increasingly evident. medium or high income.

In addition, the complexity of the organization of the Brazilian tax system - with its numerous taxes, contributions, fees and differentiated rates - needs to be addressed. Reducing bureaucracy and simplifying the system will represent savings in large resources that can be used in productive areas, job creation and investment in innovation and productivity, which will benefit the economy as a whole.

It is evident that the appetite for revenue from all government bodies will not be controlled overnight. What governments in general do not see is that, often, reducing taxes can be equivalent to increasing the collection due to the greater economic movement of the benefited sectors. There are still no figures available on the collection of taxes on sectors that this year benefited from the tax exemption. However, it is clear that reducing tax collection makes the economy move more vigorously.

An example of this positive effect is the vehicle sector, which benefited from the reduction in the IPI. In June, sales in the sector reached a new record: 300.174 units, 21,54% more than in May 2009 and 17,2% above June 2008. In the first half of 2009, when much of the Brazilian economy was hit due to the crisis, 1,45 million cars were sold, another record.

In view of the difficulties that the tax reform will continue, still under discussion in the Chamber of Deputies, the government may adopt specific measures to reduce the pressures imposed by the tax burden. The government is studying to relieve companies' payroll, reducing the Social Security contribution rate from 20% to up to 15% to stimulate productivity. Hopefully, the initiative will actually be adopted.

Lúcio Abrahão, TAX LAWYER